Hello and

welcome to Moneygirls quick and dirty tips for a richer life.

Today's topic, more answers to your questions about investing for retirement.

Several of you have asked questions about investing for retirement and I want to answer some more of your questions in today's episode.

A listener named Ashish emailed me with this question.

Can I contribute to a traditional IRA account after taxes?

I don't qualify for tax deductions due to income limits. I'm doing this so that I can

convert my traditional IRA to a Roth in the year 2010. Secondly, will I have to pay taxes at the conversion time in 2010 if I contribute to a

traditional IRA after taxes?

Great questions, Ashish.

The answer to your first question is yes.

You can make non-deductible contributions to a traditional IRA

even if you're not eligible to make deductible contributions.

Although you miss out on the tax deduction, you still get the benefit of tax-deferred

earnings growth.

The IRA contribution limit for 2007 is $4,000 and it will go up to $5,000 in 2008.

If you're age 50 or older, you can contribute an additional $1,000.

To fully deduct contributions to a traditional IRA, your modified adjusted gross income must be less than $62,000 for 2007 if you're single.

If you're married filing jointly, your income must be less than $103,000 to fully deduct your contributions.

Your strategy to contribute to a traditional IRA now so that you can convert it to a Roth in the year 2010 is an excellent one.

Since your income is too high to allow you to contribute to a Roth now,

by planning ahead and contributing to a traditional IRA first, you'll have a healthy sum to convert to a Roth come 2010.

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